Financial payments flow between firms and government, Macroeconomics

Explain whether, the following statements are TRUE, FALSE or UNCERTAIN. Briefly justify your answer.

(i) The circular flow shows how real resources and financial payments flow between firms and government.

(ii) A leakage is money that flows to firms without being cycled through households.

(iii) A closed economy is an economy with excessive government expenditure

(iv) The larger the marginal propensity to consume, the larger is the multiplier.

(v) A change in the amount households wish to save of each levels of income leads to a change in equilibrium income, but no change in equilibrium saving, which must equal planned investment.

(vi) An increase in government expenditure accompanied by an equal increase in net taxes will have no effect on output.

(vii) Shocks to aggregate demand immediately be offset by fiscal policy.

(viii) The effect of foreign trade is to reduce the size of the multiplier

(ix) The precautionary motive for holding money reflects a need for liquid assets.

(x) When you tried everywhere else to get money for your holidays, you go to the lender of last resorts

(xi) Movements along the IS schedule tell us about shifts in equilibrium income caused by shifts in the aggregate demand schedule as a result only of changes in interest rates.

(xii) There are no costs to inflation so long as it can be fully anticipated.

(xiii) Unemployment is always a bad thing.

(xiv) The law of comparative advantage ensures that there are gains from trade which make everyone better off.

Posted Date: 11/26/2013 6:11:23 AM | Location : United States







Related Discussions:- Financial payments flow between firms and government, Assignment Help, Ask Question on Financial payments flow between firms and government, Get Answer, Expert's Help, Financial payments flow between firms and government Discussions

Write discussion on Financial payments flow between firms and government
Your posts are moderated
Related Questions
what are the effects of interest rate in the economy of south africa in unemployment, economic groth, employment. and economic growth

Explain the meaning of a production possibilities curve

Estimate the cost of expanding a planned new clinic by 20,000ft^2. The appropriate capacity exponent is 0.66, and the budget estimate for 200,000ft^2 was $15 million.

Gross domestic product Definition Perhaps the most significant concept in macroeconomics is Gross Domestic Product (GDP): Gross Domestic Product (GDP) is defined as the

1.  Calculate the duration of a par value bond with a coupon rate of 8% and a remaining time to maturity of 5 years. 2. On September 26, the spot price of gold was $320 per ounc

Examine the efficiency of quanttitative credit control instrument

Recognize which of the following purchases is counted as a part of NI: a) Tata motors purchases tire from Good year to equip latest Indica. b) Tata motors purchases tires fr

Habelers theory of opportuniyu cost

Overnight target rates and inflation One of the major targets of every central bank is a low and stable inflation. Its main control variable is the overnight interest rate tar

A monopoly is broken into a number of competitive parts. Predict the changes in output and price which are likely to take place. Making the basic assumptions that,  1) The i